President Clinton today proposed new steps to strengthen the sound,
comprehensive energy strategy that has helped keep the U.S. economy robust. The
President called for the creation of a regional home heating oil reserve and
reauthorization of the Strategic Petroleum Reserve. He also called for
enactment of a tax package that will help ensure the productive capacity of the
domestic oil industry and that must include measures to promote greater energy
efficiency and renewable energy -- measures which Congress has failed to act on
twice before. These steps will enhance America's energy security, create
jobs, protect the environment, and produce long-term savings for consumers.

PRESIDENT CLINTON AND VICE PRESIDENT GORE'S PLAN TO STRENGTHEN
AMERICA'S ENERGY SECURITY INCLUDES:

· Establishing A Regional Home
Heating Oil Reserve: In order to reduce the likelihood that future heating
oil shortages will harm consumers, the President is proposing the creation of a
home heating oil reserve in the Northeast with an appropriate trigger that
could supply additional heating oil to the market in the event of a supply
shortage. The President today directed the Department of Energy to commence the
appropriate environmental reviews to create this home heating oil reserve and
will work with Congress to pass authorizing legislation this year.

· Reauthorizing the Strategic
Petroleum Reserve: Current authorization to operate the Strategic Petroleum
Reserve expires on March 31st, even as OPEC oil ministers are meeting in Vienna
to discuss production quotas. To ensure the ability to use all available tools
to respond to the needs of the U. S. economy, the President called on Congress
to immediately reauthorize the Energy Policy and Conservation Act, which
authorizes the Strategic Petroleum Reserve and the International Energy Program
at DOE.

· Enacting A Comprehensive Tax
Package To Promote Energy Security: The President today proposed a
comprehensive package of tax incentives, including new tax credits for domestic
oil producers to reduce U.S. reliance on oil imports and essential incentives
to promote renewable and efficient sources of energy for U.S. economy. This
tax package:

· Will Help Preserve Productive
Capacity of the Domestic Oil Industry: President Clinton will propose
adjusting the tax treatment for certain exploration activities and to lower the
business costs to producers when oil prices are low. The Administration will
also continue examining opportunities to preserve marginal well production,
which accounts for over 20 percent of on-shore oil production in the lower-48
states.

· Must Include Measures To Improve
the Energy Efficiency of the Economy and to Promote the Use of Alternative
Energy Sources: To improve the energy security of our economy, President
called on Congress to pass the energy efficiency and renewable energy tax
components proposed in his current budget. These include tax credits for
electric, fuel cell, and qualified hybrid vehicles, tax credits for efficient
homes and buildings, and tax credits for non-petroleum based energy sources
including wind, biomass, and methane.

· Investing In Energy Efficiency
and Alternative Energy Technologies. President Clinton and Vice President
Gore are calling on Congress to enact more than $1.4 billion in budget requests
that will promote energy security and the use of alternative and more efficient
energy technologies, including:

·
$275 Million To Make America's Homes and Buildings More Efficient

·
$173 Million To Weatherize Low Income Households

·
$255 Million To A Partnership For A New Generation Of More Efficient
Vehicles

·
$410 Million To Develop Sources Of Domestic Renewable Energy

DETAILS OF THE CLINTON/GORE

ACTIONS TO ENHANCE AMERICA'S ENERGY SECURITY

Energy-Efficiency Enhances Energy Security And Strengthens The
Economy: The strong performance of our economy over the past year, despite
oil price rises, underscores the dramatic improvements in energy efficiency and
reliability over the past quarter century. While past oil shortages have taken
a significant toll on the U.S. economy, the recent increases in oil prices have
yet to have a major impact on the U.S. economy. Increased energy efficiency
 in cars, homes, and manufacturing  has helped insulate the economy
from these short-term market fluctuations. In 1974, we consumed 15 barrels of
oil for every $10,000 of gross domestic product. Today we consume only 8
barrels of oil for the same amount of economic output.

But we can do even better.

President Clinton And Vice-President Gore Today Announced Important
Steps To Promote Energy Security & Efficiency In America. These Steps
Include:

I. Establishing A Regional Home Heating Oil Reserve: The
President remains concerned about the effect that future shortages of home
heating oil may have on consumers of home heating oil, particularly in the
Northeast and New England. In order to reduce the likelihood that future
shortages will harm consumers, the President will:

· Support The Establishment of
a Regional Reserve: The President supports the creation of a home heating
oil reserve with an appropriate trigger in the Northeast to combat future
product shortages. In the event of home heating oil shortages, heating oil can
be sold from the reserve in order to increase the supply on the market.

· Direct DOE To Undertake
Necessary Environmental Reviews: The President has directed the Department
of Energy to begin the appropriate environmental reviews for the creation of a
home heating oil reserve in the Northeast.

· Call on Congress to Establish
Reserve Through Legislation: The President calls on Congress to pass
legislation that authorize the creation of a regional product reserve, and
includes an appropriate trigger. The President reserves his right to establish
a reserve under his existing authority, subject to the outcome of the
environmental reviews, in the event that Congress fails to act.

II. Reauthorizing the Strategic Petroleum Reserve: Current
authorization to operate the Strategic Petroleum Reserve expires on March 31st,
even as OPEC oil ministers will be meeting in Vienna to discuss production
quotas. In order to ensure that the President maintains the ability to use all
available tools to respond to the needs of the United States economy, he will
call on Congress to immediately reauthorize Titles I and II of the Energy
Policy and Conservation Act, which authorize the Strategic Petroleum Reserve
and the International Energy Program at the Department of Energy.

III. Enacting A Comprehensive Tax Incentive Package: In order
toinsulate the economy from the effects of future energy price
increases, the United States needs comprehensive and balanced package of tax
incentives. This comprehensive approach includes support for domestic oil
producers to reduce our reliance on oil imports and must include incentives to
continue expanding renewable energy and increasing the energy efficiency of our
economy. These tax proposals are either paid for in the President's budget
or will be paid for with offsets.

A. Preserving Productive Capacity of the Domestic Oil
Industry: In addition to calling for steps to decrease our demand for oil
through increased efficiency, the President is proposing new steps to support
new domestic exploration and production, and to lower the business costs of
producers when oil prices are low. These tax proposals will cost less than $1
billion over ten years. The Administration will also continue examining
opportunities to preserve marginal well production.

Support New Domestic Exploration and Production: Major
technological advances in oil exploration, such as three- and four-dimensional
seismic drilling, are helping us to find more oil, at greater depths, on and
off-shore. At the same time, these technologies have reduced the environmental
footprint left by exploration and production to 1/10th the size it was 25 years
ago. We need to encourage the use of these advanced technologies at the same
time we support exploration for oil and gas.

ü Expensing of
Geological and Geophysical Costs: The President is proposing to support
domestic exploration and production by adjusting the treatment of the costs of
exploration and development -- geological and geophysical costs -- in the tax
code. Under current law, geological and geophysical costs may be deducted in
current year if exploration activity was unsuccessful, but must be capitalized
if the exploration activity was successful. By allowing the industry to expense
these costs, we will be encouraging the discovery of new reserves. The
Department of Energy estimates that G&G will add 126,000 barrels of oil a
day to domestic production.

Allowing Expensing of Delay Rental Payments: A "delay
rental payment" is an amount paid by a lessee to the lessor of a petroleum
resource when the lessee does not begin producing commercial quantities of oil
or natural gas as soon as was agreed to. The delay rental payment is intended
to compensate the lessor for the royalties he does not receive while production
is delayed. Currently, the Federal tax code requires delayed rental expenses to
be capitalized to the depletable base of the property to which they relate if
the property is being held for development. Prior to 1993 all delayed rental
payments were allowed to be expensed in the year incurred. Allowing producers
to expense delay rental payments will lower the cost of doing business on
Federal lands.

Examining Measures to Preserve Marginal Production: The
Administration will continue to examine measures to preserve marginal well
production, which accounts for over 20 percent of on-shore oil production in
the lower-48 states.

B. Improving the Energy Efficiency of the Economy: Any tax
package to improve the energy security of the country must include incentives
to improve energy efficiency and promote the use of renewable energy. The
President has proposed:

Tax Credits For Electric, Fuel Cell, and Qualified Hybrid
Vehicles. Cars and light trucks (including minivans, sport utilities, and
pickups) currently account for about 40 percent of the nation's oil
consumption. Tax credits for electric, fuel cell, and hybrid vehicles will help
to move advanced technologies that use less or no oil from the laboratory to
the highway. President Clinton is calling for Congress to:

ü Extend the current
tax credit for electric vehicles and fuel cell vehicles. Under current law,
a 10 percent credit, up to $4,000, is provided for the cost of qualified
electric vehicles and fuel cell vehicles. The credit begins to phase down in
2002 and phases out in 2005. The President's proposal would extend the tax
credit at its $4,000 maximum level through 2006.

ü Pass tax credits for
hybrid vehicles. The President proposes a $500 to $3,000 credit, depending
on the vehicle's design performance, for all qualifying hybrid vehicles,
including cars, minivans, sport utility vehicles, and pickup trucks.

Tax Credits for Efficient Homes and Buildings. Increasing
the efficient use of power will reduce our reliance on fossil fuels. To
encourage energy efficiency, the President is calling on Congress to pass tax
incentive that will promote the use of energy efficient practices and
technologies in our homes and buildings.

ü Tax credit for new
energy efficient homes. To encourage the purchase of
new energy efficient homes, the President proposes a tax credit of between
$1,000 and $2,000 for new energy efficient homes.

ü Tax credit for
energy efficient equipment in new and existing homes or buildings. To
encourage the purchase of electric heat pump water heaters, natural gas heat
pumps, and fuel cells, the President proposes a tax credit equal to 20 percent
of the cost of the investment, subject to a cap, for equipment purchased
between 2001 and 2004.

C. Enacting Tax Credits To Diversify Fuel Sources in the Economy:
The President's Council of Advisors on Science and Technology, in its
1997 report to the President recommended that the federal government invest in
developing a broad portfolio of energy sources. To promote the development of
these new energy sources, the President has proposed:

Tax Credits for Efficient Non-Petroleum Based Sources of
Power: In support of the PCAST recommendation, the President has proposed,
and calls on Congress to pass tax credits to promote innovative and sustainable
sources of energy supply including:

ü Tax Credits For
Solar Energy Systems. A 15 percent tax credit will encourage the purchase
by consumers and businesses of solar energy systems. The maximum credit would
be $2,000 for rooftop photovoltaic systems and $1,000 for solar water heating
systems.

ü Tax Credits For Wind
Power.Current law encourages the production of
electricity from wind through a tax credit of 1.5 cents per kilowatt hour
(adjusted for inflation after 1992). The current tax credit covers facilities
placed in service before January 1, 2002. The President proposes a 2.5-year
extension of this tax credit.

ü Tax Credits For
Electricity Produced From Biomass. Biomass refers to trees, crops and
agricultural wastes used to produce power, fuels or chemicals. This package of
credits would:

· Provide
Tax Credits For Open Loop Biomass: Expand the availability of the biomass
credit of 1.5 cents per kilowatt hour to include "open-loop" biomass (certain
forest-related resources and agricultural and other sources) for facilities
placed in service from 2001-2005, and provides a 1.0 cent credit for
electricity produced from 2001-2003 from facilities placed in service prior to
January 1, 2001.

ü Tax Credits For
Methane from Landfills: Adds a 1.5 cent per kilowatt hour credit for
electricity produced from landfills not subject to EPA's 1996 New Source
Performance Standards/Emissions Guidelines (NSPS/EG) and 1.0 cent per kilowatt
hour for landfills subject to NSPS/EG. Qualified facilities would be facilities
placed in service after December 31, 2000 and before January 1, 2006.

IV. Making Common Sense Investments In Promoting Energy Efficiency
And Alternative Energy Technologies. In addition to providing tax credits
to promote domestic oil production and energy efficiency, the President and
Vice President have already presented budget requests for appropriations that
will further promote energy security. They have proposed a budget that includes
over $1.4 billion next year to accelerate the research, development, and
deployment of alternative and more efficient energy technologies.

$275 Million To Make America's Homes and Buildings More
Efficient: The Administration has proposed funding for research to make
offices, homes, and appliances 50 percent more energy efficient within a decade
and has proposed $275 million in the budget to help do so. People understand
what that means for their home heating bill. Overall, meeting this goal would
save consumers $11 billion a year in energy costs.

$173 Million To Weatherize Low Income Households: Our budget
proposesexpanding DOE's Weatherization Assistance Program, which
helps low-income households make their homes more energy efficient. These are
the Americans that most need to reduce monthly energy costs. This program has
already weatherized almost 5 million low-income homes and is saving 3.0 million
barrels of oil each year. With funding from DOE and the states, we plan to add
more than 150,000 homes to the list in the next year  which will save
more than an additional 91,000 barrels of oil per year. Our budget seeks $154
million for this important program for next year and an additional $19 million
for the current year in the FY 2000 supplemental appropriation.

$255 Million To Make America's Vehicles More Efficient:
Our Partnership for a New Generation of Vehicles is on track to deliver
attractive, affordable cars that get up to three times the fuel efficiency of
today's cars. A car that gets twice the fuel economy of today's
comparable vehicle is the equivalent of cutting the price of gas in half for
the American driver. A typical consumer would save more than $300 a year in
fuel costs and SUV owners would save more than $400 a year. By 2010, DOE plans
to develop and commercialize fuel efficiency and alternative-fuel technologies
that reduce oil consumption by nearly 700,000 barrels per day. By 2020,
these technologies will reduce oil consumption by nearly 1.5 million barrels
per day. Our budget seeks $255 million for PNGV.

$410 Million To Promote Clean Renewable Energy: The
President's FY01 budget proposes $410 million for DOE efforts to develop
domestic sources of renewable energy, including wind, photovoltaics and
geothermal energy. In addition, the President's Bioenergy Initiative will
help us create new fuels for our cars that will reduce U.S. oil consumption,
create new income opportunities in rural America, and meet environmental
challenges, such as climate change.

Studies on Diversifying Fuels in the Northeast and New England:
The Northeast and New England are disproportionately reliant on home
heating oil as a fuel to heat and power homes, businesses and industry. On
February 16th the President directed Department of Energy to undertake a study
of ways the region could diversify its energy sources thereby minimizing the
effect of a volatile home heating oil market on the regional economy. The
Department is also studying the effects of interruptible natural gas contracts
on the home heating oil market in the region.